Translation: Measures for the Supervision and Administration of Online Transactions (Draft for Comments) – SIPS

Published on October 20, 2020

Chapter One General Provisions

Article 1 – These Measures are formulated in accordance with relevant laws and administrative regulations in order to regulate online transaction activities, maintain the order of online transactions, protect the legitimate rights and interests of all parties to online transactions, and promote the sustainable and healthy development of the digital economy,

Article 2 – These Measures shall apply to the business activities of selling commodities or providing services within the territory of the People’s Republic of China, through the Internet and other information networks and under the supervision and management of market supervision and management departments. These Measures are applicable to business activities of selling goods and providing services via information network activities such as online social networking and webcasting.

Article 3 – When engaging in business activities, online trading operators shall comply with the principles of voluntariness, equality, fairness, and integrity, abide by laws, regulations and these measures, comply with business ethics and public order and good customs, participate in market competition fairly, earnestly perform legal obligations, and actively assume main responsibility and accept supervision from the public.

Article 4 – Supervision and management of online transaction shall adhere to the principles of encouraging innovation, tolerance and prudence, strict adherence to the bottom line, and integrated online and offline supervision.

With regard to new industries and models of online transactions, inclusive and prudent supervision shall be implemented to ensure adequate space for development, while ensuring the quality of goods and services and the safety of transactions.

Article 5 – [We shall] guide online trading operators [vendors], online trading industry organizations, consumer rights protection organizations, and consumers to participate in the governance of the online trading market, and continuously improve the online trading market governance system that is diversely participated, effectively coordinated, and orderly. Online trading industry organizations shall carry out industry self-discipline in accordance with their articles of association, establish and improve industry standards, and guide operators in their industry to operate in good faith and abide by the law, and engage in market competition fairly.

Chapter II Online Transaction Operators

Section 1 – General Provisions

Article 6 – The term “online transaction operators” as used in these Measures refers to natural persons, legal persons and unincorporated organizations that organize and carry out online transaction activities, including operators of online trading platforms, operators on the platforms [vendors], operators of self-built website, and online trading operators who conduct online trading activities through other online services, such as online social networking and webcasting.

The operators of online trading platforms in these Measures refer to legal persons or unincorporated persons who provide online business premises, transaction matching, information release and other services to both parties or multiple parties in online trading activities to independently carry out online trading activities. The term “operator on the platform” as mentioned in these Measures refers to online transaction operators who conduct online trading activities through online trading platforms [vendors].

Providers of other network service, such as social networking and webcasting, who provide operators [vendors] with business space, and provide supporting services related to the completion of transaction such as product browsing, order generation, online payment, etc., shall perform the duty of operators of network trading platform in accordance with law in terms of the examination of operator’s [vendor’s] qualification, monitoring product and service information, safeguarding consumer rights, protecting intellectual property rights, providing information and data, and cooperating with supervision and law enforcement, etc.. Online trading operators [vendors] who carry out online trading activities through other online services such as social networking, webcasting, etc., shall refer to the relevant provisions of these Measures relating to operators on the platforms.

Article 7 – Online trading operators [vendors] shall not violate laws, regulations, and the provisions of the State Council’s decisions to engage in operations without license or certificate. Online trading operators [vendors] shall register as market participants in accordance with the law, unless exempted from market participants registration under Article 10 of the E-Commerce Law,

The term ” occasional and low-value transactions” mentioned in Article 10 of the E-Commerce Law means that online trading operators do not exceed 52 transactions annually, and the amount of annual transactions does not exceed the average annual salary of employees of urban private entities in the same province, autonomous region, or municipality in the previous year. Where the same operator opens multiple online stores on the same platform or on different platforms, the annual number of transactions and annual transaction volume of each online store shall be aggregated.

The “public convenience services” referenced in Article 10 of the E-Commerce Law refers to the commercial labor activities that serve the living of local and surrounding residents, including cleaning, cooking, washing, sewing, haircutting, moving, key making, pipeline dredging, home appliances and furniture repairs, etc.

Article 8 – Online trading operators [vendors] who apply for registration as individual business are permitted to register their online business premises as their places of business . For those engaged in business activities on two or more online trading platforms, all online business premises engaged in business activities shall be registered with the registration authority. It is permitted to register the place of habitual residence as the registered place of business, and the market supervision and management department of the county, autonomous county, municipal without districts, or district under municipal where the individual’s residence is located shall be its registration authority.

Article 9 – Where an online trading operator [vendor] registers an online business premise as place of business, the online trading platform on which it operates or the network service provider which it uses shall issue a proof of the address of the online business premise for it. The address proof shall be complete, accurate and can be independently identified and verified at any time.

Article 10 – An online trading operator shall, in a prominent position on the homepage of its website or the main page where it conducts its business activities, continuously publish the operator’s entity information or provide a link to such information. Online trading operators are encouraged to provide a link to the State Administration for Market Regulation’s electronic business license system and publish their business license information.

Online trading operators that have registered as market participants shall publish the following information as well as administrative licensing information, actual address, and contact information that is related to its business:

The enterprise shall publish the unified social credit code (registration number), name, type of enterprise, legal representative (person in charge), domicile, and registered capital (capital contribution) information published in its business license;
Individual business shall publish information on the unified social credit code (registration number), name, operator’s name, business location, and form of composition published in their business license;
Farmers’ professional cooperatives shall publish the unified social credit code (registration number), name, legal representative, domicile, and total capital contribution information of the members published in its business license.

In accordance with Article 10 of the E-Commerce Law, operators who have not registered as market participants shall publish the following self-declarations and their actual addresses and contact information according to their actual types of business activities:

“Individuals selling self-produced agricultural and sideline products are exempted from the registration of market entities in accordance with the law”;
“Individual sales of household handicraft products shall be exempt from the registration of market entities in accordance with the law”;
“Individuals who use their own skills to engage in convenient labor services that do not require a license in accordance with the law are exempt from the registration of market entities in accordance with the law”;
“Individuals engaged in sporadic small-value trading activities are exempted from the registration of market entities in accordance with the law.”

If the information published by the online transaction operator changes, the updated publicity shall be completed within six working days.

Article 11 – When collecting and using users’ personal information, online trading operators shall obtain the authorization and consent of the collector, and shall clearly state the purpose, necessity, scope and method of collection and use based on the principles of lawfulness, fairness and necessity, and shall not use a one-time summary authorization, or use other means such as default authorization, bundle with other authorizations, stop installation and use [on condition of authorization], etc., to force or to force in disguise the person to be collected [user] to agree to the collection and use of information that is not directly related to business activities. Collecting and using sensitive information such as biometric information, health information, property information, social information, etc., shall be subject to the authorization and consent of the person to be collected for each item.

Online transaction operators and their staff shall maintain strict confidentiality for collected personal information, and shall not provide it to any third party, including related parties, without the authorization and consent of person collected [user].

Article 12 – Online trading operators shall not deceive or mislead consumers in the following ways:

Fictitious transactions;
Fabricating evaluations, or instigating, inducing, or coercing others to make false or misleading evaluations;
Misleading display of evaluations through improper handling methods such as deleting, concealing, or modifying evaluations, or pre-reporting good reviews, post-reporting bad reviews, or confusing evaluations of different goods or services;
Using false or misleading pricing forms or price methods to deceive or induce consumers to conduct transactions with them;
Using false advertising, promotion methods, samples, product or service descriptions, product or service standards, etc.;
Forging or fraudulently using market entity registration information and administrative license information;
Confusing the source of goods or services;
Fictitious marketing activities such as fictitious spot, false booking, and false panic buying;
Other acts that deceive or mislead consumers.

Article 13 – If consumer evaluations contain information that is prohibited by laws or administrative regulations from being published or transmitted, online trading operators may perform technical processing in accordance with the law.

Article 14 – Absent their explicit consent of consumers, online trading operators shall not send advertisements and other commercial information to consumers. If the consumer explicitly consents [to receiving such information], an obvious, free and simple way to refuse receiving [future information] shall be provided to the consumer. If the consumer refuses to receiving such information, the online trading operator shall immediately stop sending, and may not send again by changing [the operator’s] name.

Article 15 – Where online trading operators sell goods or services to consumers by directly bundling [with other goods or services] or provide multiple options, they shall, in a prominent way, remind consumers to pay attention. Where multiple options are provided, any option that involves bundling goods or services shall not be set as the default consented [choices] for consumers, and the options selected by consumers in previous transactions shall not be set as the default choices of consumers in subsequent independent transactions.

Article 16 – Where online trading operators provide services in a manner that involves non-spontaneous contracting by consumers, such as automatic extension [of subscription] and automatic renewal, they shall, in a prominent way, remind consumers to pay attention. Where consumers independently choose a method [of subscription], the online transaction operator shall provide consumers with an obvious, free and simple way to cancel or change the relevant method [of subscription] at any time during the entire service period, and in a significant way, remind the consumers five days before the date of extension or renewal to pay attention.

Article 17 – Online transaction operators shall provide information on the relevant conditions of goods or services in accordance with the Consumer Rights Protection Law, the Product Quality Law and other relevant laws and regulations, and fully protect consumers’ right to know and choose.

Article 18 – Online transaction operators shall not use standard terms and conditions to exclude or restrict consumers’ rights of choice to file complaints with relevant administrative departments, or request mediation, arbitration, litigation and other consumer dispute resolution methods with consumer protection organizations.

Article 19 – Online trading operators shall submit the prices, sales volume, and sales of goods or services and other data information in specific time periods, categories, and regions in accordance with the requirements of the State Administration for Market Regulation and the provincial market supervision and administration department authorized by the State Administration for Market Regulation.

Article 20 – When an online trading operator terminates online trading activities on its own, it shall continue to publicize relevant information such as the announcement of termination of online trading activities at least 30 days in advance on the homepage of its website or on the main page of the main page engaged in business activities, and take reasonable measures to ensure the legitimate rights and interests of consumers and related operators.

Article 21 – Online trading operators who organize and carry out online trading activities through other online services such as online social networking, online live broadcasts, etc., shall display information such as the actual business entity and after-sales service of goods or services in a prominent way, or perform link jump prompt. Webcast service providers shall provide a lookback function for online trading activities carried out through webcasts.

Section 2 – Online Trading Platform Operators

Article 22 – Operators of online trading platforms shall require operators [vendors] who apply to enter the platform to sell goods or provide services to submit authentic information such as their identity, address, contact information, administrative licenses, etc., shall conduct verification and registration, establish registration files, and perform registration procedures. Such files shall be verified and updated at least every six months.

Article 23 – An online trading platform operator shall submit the identity information of the operator on the platform to the provincial market supervision and administration department at the [operator’s] place of residence from January 1 to January 15, and from July 1 to July 15 of each year. The identity information of the operators on the platform shall include:

Information such as the name (name), unified social credit code (registration number), contact information, name of the online store, and website link of the operator on the platform that has been registered as a market entity;
The name, ID number, actual business address, contact information, online store name and website link of the operator on the platform that has not registered for market entity registration, and self-declaration of specific circumstances that do not require market entity registration according to law.

Network trading platform operators and market supervision and management departments are encouraged to establish automated information reporting mechanisms in the form of open data interfaces.

Article 24 – Operators of online trading platforms shall provide technical support for operators on the platform to comply with their information disclosure obligations in accordance with the law. If the information published by the operator on the platform changes, the change shall be reported to the platform within three working days, and the platform shall conduct verification within three working days and publish the updated information.

Article 25 – Operators of online trading platforms shall distinguish between those who have completed the registration of market entities and those who have not completed the registration of market entities in a conspicuous manner to ensure that consumers can clearly identify, intuitively understand, and make independent choices.

Article 26 – When an online trading platform operator changes its platform service agreement and transaction rules, it shall completely preserve all historical versions of the platform service agreement and transaction rules to ensure that operators and consumers can conveniently and completely read and download them.

Article 27 – The operator of an online trading platform shall establish an inspection and monitoring system for operators who enter the platform to sell goods or provide services and the information on the goods or services they publish. If it finds that an operator on the platform or the goods or services that are being sold or provided have violated laws, regulations, rules and the circumstances prescribed in these Measures in regards to market supervision and management, then necessary measures shall be taken in accordance with the law, and relevant records shall be kept.

If the operator of the online trading platform discovers that an operator on the platform violates the provisions of Articles 12 and 13 of the E-Commerce Law, and other laws, regulations and rules that require reporting to the market supervision and management department, the operator of the online transaction platform shall report to the market supervision and management department at or above the county level where the platform is located.

Article 28 – If an online trading platform operator issues warnings, suspends service, or terminates services of platform operators in accordance with the provisions of laws, regulations, rules, or service agreements and transaction rules, the operator shall announce such issuance within 24 hours, including information such as the name of the online store of the operator on the platform, the illegal activities, and handling measures. Short-term measures such as warnings and suspension of services shall be continuously publicized until the expiry date of the implementation of the measures.

Article 29 – The operator of an online trading platform shall keep long-term storage of identity information of the operators on the platform [vendors], and shall keep storage of transaction information such as goods or services, consumer payment, logistics and express delivery, return and exchange, and after-sales information for no less than three years from the date of completion of the transaction. Where laws and administrative regulations provide otherwise, those provisions shall prevail.

Article 30 – Where the operator of an online trading platform receives a notice from the intellectual property right holder in accordance with Article 42 of the E-Commerce Law or a [counter-] statement submitted by the operator on the platform in accordance with Article 43 of the E-Commerce Law, within 24 hours it shall publish basic information about the processing status in a prominent position on the main page of the operator’s business activities on the platform; within 24 hours after receiving the notice that the intellectual property right holder has filed a complaint or sued, it shall publish continuously basic information about the complaint or the lawsuit in a prominent position on the main page of the operator’s business activities on the platform.

After the operator of the online trading platform forwards the statement of the operator on the platform to the intellectual property right holder, if it does not receive a notice that the intellectual property right holder has filed a complaint or a lawsuit within 15 days, within 24 hours it shall terminate the handling measures taken and shall withdraw the public information specified in the preceding paragraph.

Article 31 – Operators of online trading platforms must not abuse their dominant position to interfere with the independent operations of operators on the platform, and must not impose unreasonable restrictions or conditions on commercial cooperation between operators on the platform and other platforms.

Operators on the platform can independently choose to carry out business activities on multiple platforms. Regarding matters related to the establishment or modification of exclusive business partnerships between the platform and the operators on the platform, fair negotiations shall be conducted on an equal basis, and cooperation conditions, obligations of both parties, and liabilities for breach of contract shall be clearly agreed in writing. The platform shall not force the operators on the platform [vendors] to accept [the exclusive business partnership] by imposing unreasonable means such as lowering the operators’ [vendors’] place in the search result, taking down products, restricting operations, blocking stores, and increasing charges for services. Where the platform proposes to establish or change matters related to exclusive business cooperation relationships, causing losses to the operators on the platform, the operators on the platform shall be reasonably compensated.

Article 32 – If an operator of online trading platform intends to terminate platform services, it shall publicize it in a prominent position on the main page of its website at least three months in advance, notify consumers and relevant operators, and take necessary measures to protect the legitimate rights and interests of consumers and relevant operators [vendors].

Article 33 – Operators of online trading platforms shall cooperate with market supervision and management departments in accordance with the law, and provide, as required, the identity information, commodities or service, consumer payments, logistics and express delivery, return and exchange, after-sales transaction information and other data information that are related to supervision and inspection, case investigation, handling of accidents and consumer disputes and other regulatory and law enforcement activities.

An operator who provides online transaction operators [vendors] with services such as promotion, payment and settlement, logistics express, network access, server hosting, virtual hosting, cloud services, website and web page design and production, etc., shall promptly assist market supervision and management department in investigating illegal online transactions and provide relevant data and information in its possession as required in accordance with the law.

Where the market supervision and management department discovers that online trading operators have violated market supervision and management laws, regulations, and rules, and requires online trading platform operators and other service providers to take measures to stop them, the online trading platform operators and other service providers shall cooperate.

Chapter III – Supervision and Administration

Article 34 – The State Administration of Market Supervision is responsible for organizing and guiding the supervision and management of online transactions across the country, and the market supervision and management departments at or above the county level are responsible for the supervision and management of online transactions within their administrative regions.

Article 35 – The illegal activities of operators of online trading platforms and self-built websites shall be under the jurisdiction of the market supervision and management department of their domicile.

Illegal activities of operators on the platform are under the jurisdiction of the market supervision and management department where they actually operate; and if the market supervision and management department where the online trading platform resides first discover or receive clues to the violations, it may also exercise jurisdiction. Regarding consumer complaints against operators on the platform, both the actual business location of the operators on the platform and the market supervision and management department where the operators of the online trading platform are located have the authority to handle.

Article 36 – The market supervision and management department of the domicile of the operator of the online trading platform and the actual operation place of the operator on the platform shall strengthen coordination in daily management and law enforcement activities. The provincial market supervision and administration department in the place where the operator of the online trading platform is domiciled shall, according to work needs, timely share identity information of the operator in the platform with the provincial market supervision and administration department in the actual place of operation.

Article 37 – Market supervision and management departments shall take necessary measures to protect the security of data and information provided by online trading operators, and strictly keep the personal information, privacy and business secrets in it confidential, and shall not disclose, sell or illegally provide it to others.

Article 38 – Market supervision and management departments shall implement credit supervision on online transaction operators, and include information, such as the operators’ market entity registration, administrative license, filing, qualification certification, spot check and inspection results, the inclusion of the operator in the list of abnormal business operations and the inclusion of the operator in the list of companies that seriously violate the law, and administrative penalties, in the credit records. In addition to the unified collection and disclosure of the above company-related information through the national enterprise credit information publicity system, it can also publicize the above information through the official website of the market supervision and management department, online search engine, and in a prominent position of the main page where the operator engages in business activities.

Article 39 – When investigating and punishing suspected illegal online transactions, the market supervision and administration department may exercise the following powers in accordance with the law:

Conduct on-site inspections of venues related to suspected illegal online transactions;
Consult and copy contracts, bills, account books and other relevant materials related to suspected illegal online transactions;
Collect and retrieve electronic data related to suspected illegal online transactions;
Interrogate parties suspected of engaging in illegal online transactions;
Investigate and collect relevant information from natural persons, legal persons and unincorporated organizations related to suspected illegal online transactions;
Other measures that can be taken as provided by laws and regulations.

If the measures specified in the preceding paragraph need to be filed for approval in accordance with the law, the approval procedures shall be completed in accordance with the law.

The technical monitoring records for online commodity transactions and related service activities by the market supervision and management department can be used as electronic data evidence to impose administrative penalties or take administrative measures against illegal online commodity operators and related service operators.

Chapter IV – Legal Liability

Article 40 – Online trading operators who violate the provisions of Articles 10, 20, and 24 of these Measures shall be punished in accordance with the provisions of Article 76, paragraph 1, of the E-Commerce Law.

Article 41 – If an online trading platform operator fails to take necessary measures against the operator on the platform that violates the provisions of Articles 10 and 20 of these Measures, or violates the provisions of Article 24 of these Measures, it shall be punished in accordance with the second paragraph of Article 76 of the E-Commerce Law.

Article 42 – Online trading operators who violate Article 11 of these Measures shall be punished in accordance with Article 56 of the Consumer Rights Protection Law.

Article 43 – Online trading operators who violate Article 12 of these Measures shall be punished in accordance with Article 20 of the Anti-Unfair Competition Law.

Article 44 – Online trading operators who violate Article 15 of these Measures shall be punished in accordance with Article 77 of the E-Commerce Law.

Article 45 – Online trading operators who violate the provisions of Article 18 of these Measures shall be punished in accordance with the “Measures for Supervision and Handling of Contract Illegal Acts” and “Measures for Penalties for Violations of Consumer Rights and Interests”.

Article 46 – If the operator of an online trading platform violates the provisions of Article 22, Article 23, Article 27, and Article 29 of these Measures, it shall be punished in accordance with Article 80 of the E-Commerce Law.

Among them, if the operator of an online trading platform has one of the following circumstances, it shall be punished in accordance with Article 83 of the E-Commerce Law:

Where it knew or ought to have known that the goods sold or the services provided by the operators on the platform do not meet the requirements for the protection of personal and property safety, or have other acts that infringe on the legitimate rights and interests of consumers, and fail to take necessary measures;
Failure to fulfill the obligation to review the qualifications of the operators on the platform that sells or provide goods or services related to the lives and health of consumers, or fails to fulfill the obligation to ensure safety for consumers.

Article 47 – Online trading operators who violate the provisions of Article 13, Article 14, Article 16, Article 19, and Article 21 of these Measures shall be ordered to make corrections within a time limit and impose a penalty of less than 10,000 yuan. If the circumstances are serious, a fine of 10,000 yuan to 30,000 yuan shall be imposed.

Article 48 – An online trading platform operator violates Article 9, Article 25, Article 26, Article 28, Article 30, Article 31, and 32 of these Measures as stipulated in Article 33, it shall be ordered to make corrections within a time limit and a fine of not less than 10,000 yuan but not more than 30,000 yuan shall be imposed.

Other service providers who violate Article 33 of these Measures shall be punished in accordance with the provisions of the preceding paragraph.

Chapter V Supplementary Provisions

Article 49 – The State Administration for Market Regulation is responsible for the interpretation of these Measures.

Article 50 – These Measures shall come into force on _____. The “Measures for the Administration of Online Transactions” issued by the former State Administration for Industry and Commerce on January 26, 2014, shall be repealed simultaneously.

Original Chinese at: http://www.samr.gov.cn/hd/zjdc/202010/t20201020_322434.html